Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Contract Balances

The following table presents the components of our contract balances:

	As of
	June 30, 2020		December 31, 2019
Trade accounts receivable and contract assets, net:
Sales and services	$	157,459	$	152,632
Leasing	4,110		4,016
Total trade accounts receivable	161,569		156,648
Contract assets	38,223		63,758
Allowance for doubtful accounts	(16,413)		(23,777)
Total trade accounts receivable and contract assets, net	$	183,379	$	196,629
Contract liabilities:
Current	$	89,831	$	101,060
Non-current	11,048		10,572
Total contract liabilities	$	100,879	$	111,632

The following table presents the revenue recognized in the Condensed Consolidated Statements of Operations that was previously included within contract liabilities:

	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Revenue	$	7,614	$	8,290	$	59,786	$	47,773

The following table presents the activity in our allowance for doubtful accounts:

	For the six months ended June 30,
	2020		2019
Balance at beginning of period	$	23,777	$	16,604
Credit losses (1)	4,393		18,862
Deductions	(10,546)		(10,053)
Foreign currency translation	(1,211)		173
Balance at end of period	$	16,413	$	25,586

⁽¹⁾ The impact of adopting ASC 326 on January 1, 2020 was a net decrease to our allowance for doubtful accounts largely driven by a $13.4 million reclassification to Other current assets, net and Other non-current assets, net, offset by a $2.9 million adjustment to Accumulated earnings (losses).

Contract Acquisition Costs

The following table presents the activity in our contract acquisition costs, net:

	For the six months ended June 30,
	2020		2019
Balance at beginning of period	$	113,592	$	114,306
Additions	49,366		47,277
Amortization expense	(51,265)		(47,762)
Foreign currency translation	(4,607)		97
Balance at end of period	$	107,086	$	113,918

We recognized amortization expenses related to contract acquisition costs of $25.6 million and $24.3 million for the three months ended June 30, 2020 and 2019, respectively.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2020, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $691.0 million. We expect to recognize 40.2% of our remaining performance obligations of these contracts as revenue in the next twelve months. This amount excludes agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain.

Disaggregation of Revenue

Geographic Information

The following table presents our revenue from customer contracts disaggregated by primary geographic market and by segment:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended June 30, 2020
North America	$	384,623	$	4,179	$	2,015	$	390,817
South and Central America	33,961		—		100		34,061
Other	34,588		—		—		34,588
Total revenue	$	453,172	$	4,179	$	2,115	$	459,466
For the three months ended June 30, 2019
North America	$	372,398	$	3,742	$	4,739	$	380,879
South and Central America	30,395		—		103		30,498
Other	49,054		—		—		49,054
Total revenue	$	451,847	$	3,742	$	4,842	$	460,431
For the six months ended June 30, 2020
North America	$	767,338	$	8,831	$	4,455	$	780,624
South and Central America	67,917		—		192		68,109
Other	76,399		—		—		76,399
Total revenue	$	911,654	$	8,831	$	4,647	$	925,132
For the six months ended June 30, 2019
North America	$	740,227	$	7,775	$	9,611	$	757,613
South and Central America	57,258		—		243		57,501
Other	99,699		—		—		99,699
Total revenue	$	897,184	$	7,775	$	9,854	$	914,813

Nature of Products and Services

The following tables presents our revenue disaggregated by the nature of products and services and by segment for the three and six months ended June 30, 2020 and 2019:

	Hughes		ESS		Corporate and Other		Consolidated Total
For the three months ended June 30, 2020
Services and other revenue:
Services	$	399,697	$	2,564	$	993	$	403,254
Lease revenue	11,052		1,615		1,122		13,789
Total services and other revenue	410,749		4,179		2,115		417,043
Equipment revenue:
Equipment	18,518		—		—		18,518
Design, development and construction services	22,668		—		—		22,668
Lease revenue	1,237		—		—		1,237
Total equipment revenue	42,423		—		—		42,423
Total revenue	$	453,172	$	4,179	$	2,115	$	459,466
For the three months ended June 30, 2019
Services and other revenue:
Services	$	381,608	$	2,400	$	1,715	$	385,723
Lease revenue	12,594		1,342		3,127		17,063
Total services and other revenue	394,202		3,742		4,842		402,786
Equipment revenue:
Equipment	30,597		—		—		30,597
Design, development and construction services	25,860		—		—		25,860
Lease revenue	1,188		—		—		1,188
Total equipment revenue	57,645		—		—		57,645
Total revenue	$	451,847	$	3,742	$	4,842	$	460,431

	Hughes		ESS		Corporate and Other		Consolidated Total
For the six months ended June 30, 2020
Services and other revenue:
Services	$	789,697	$	5,329	$	2,281	$	797,307
Lease revenue	22,225		3,502		2,366		28,093
Total services and other revenue	811,922		8,831		4,647		825,400
Equipment revenue:
Equipment	43,357		—		—		43,357
Design, development and construction services	54,225		—		—		54,225
Lease revenue	2,150		—		—		2,150
Total equipment revenue	99,732		—		—		99,732
Total revenue	$	911,654	$	8,831	$	4,647	$	925,132
For the six months ended June 30, 2019
Services and other revenue:
Services	$	762,391	$	5,217	$	3,452	$	771,060
Lease revenue	25,434		2,558		6,402		34,394
Total services and other revenue	787,825		7,775		9,854		805,454
Equipment revenue:
Equipment	56,557		—		—		56,557
Design, development and construction services	50,926		—		—		50,926
Lease revenue	1,876		—		—		1,876
Total equipment revenue	109,359		—		—		109,359
Total revenue	$	897,184	$	7,775	$	9,854	$	914,813

Lease Revenue

The following table presents our lease revenue by type of lease:

	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Sales-type lease revenue:
Revenue at lease commencement	$	1,237	$	1,188	$	2,150	$	1,876
Interest income	95		258		164		510
Total sales-type lease revenue	1,332		1,446		2,314		2,386
Operating lease revenue	13,694		16,805		27,929		33,884
Total lease revenue	$	15,026	$	18,251	$	30,243	$	36,270

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $9.4 million and $6.5 million as of June 30, 2020 and December 31, 2019, respectively.

The following table presents future operating lease payments to be received as of June 30, 2020:

	Amounts
Year ending December 31,
2020 (remainder)	$	25,789
2021	36,045
2022	34,126
2023	32,127
2024	29,733
2025 and beyond	127,816
Total lease payments	$	285,636

The following table presents amounts for assets subject to operating leases, which are included in Property and equipment, net:

	As of
	June 30, 2020						December 31, 2019
	Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net
Customer premises equipment	$	1,470,861	$	(1,143,997)	$	326,864	$	1,377,914	$	(1,043,431)	$	334,483
Satellites	104,620		(34,847)		69,773		104,620		(31,360)		73,260
Real estate	47,978		(16,606)		31,372		46,930		(16,048)		30,882
Total	$	1,623,459	$	(1,195,450)	$	428,009	$	1,529,464	$	(1,090,839)	$	438,625

The following table presents depreciation expense for assets subject to operating leases, which is included in Depreciation and amortization:

	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Customer premises equipment	$	54,845	$	46,839	$	100,566	$	92,651
Satellites	1,743		1,738		3,487		3,475
Real estate	233		558		465		1,116
Total	$	56,821	$	49,135	$	104,518	$	97,242